Food for Thought

Management Buy Out financed by Crédit Agricole Commercial Finance

Northumberland Foods Limited, the Amble–based private–label frozen food manufacturer, was formed as the result of a Buy–In Management Buy–Out (BIMBO) of Cheviot Foods Limited. The management team secured third–party investment to fund the buyout, safeguarding the future of the business and saving the jobs of the Company's 200 employees. With a strong management team in place and a healthy new business pipeline, a plan was established to achieve a turnaround of the company to build on its past successes. A short–term receivables finance facility was put in place for three months to allow the business the time to seek a more permanent source of funding.

Managing Director Peter Kirkham, comments: "We were introduced to Crédit Agricole Commercial Finance via a professional intermediary. They recommended Crédit Agricole Commercial Finance to us on the basis that they would be easy to use and quick to make decisions – and that was certainly our experience."

He continues: "Northumberland Foods is the leading private label potato speciality supplier to the UK retail market with a strong customer base and excellent long–standing relationships. Rather than worrying unduly about three year forecasts, Crédit Agricole Commercial Finance recognised beyond everything else, the inherent strengths of our customer base. We have clear proof of delivery and sound audit trails and that is their underlying security – a far more flexible and commercial approach to conducting business than any of the other lenders we had met in our due–diligence process."

Crédit Agricole Commercial Finance structured and delivered a £4million full–service invoice finance facility to meet the company's working capital requirements.

"With the invoice finance facility in place from Crédit Agricole Commercial Finance, we get the majority of our invoices paid a week after delivery rather than on stated customer terms. This early release of cash from Crédit Agricole Commercial Finance has proved to be invaluable and with their continued support, we look forward to building our business still further, which is great news for the local community and for our supply–chain. We believe in this company. We bought the business to increase it and will be investing in its future," Peter Kirkham concludes.